Small business taxes are not for the weak of heart. While taxes are doable for some business owners, others prefer to hire an accountant to help with the many nuances that come with tax season.
There is always the question of should I try filing my taxes myself or work with an accountant? We will walk you through some pros and cons of each approach.
1. Time
Regardless of whether you choose to work with a tax preparer or use software packages on your own, either way you’ll have to pull together an enormous amount of documentation and forms. The list will include:
- Personal information, such as social security numbers and legal names and applicable business names.
- Last year’s tax return
- Profit and loss report and balance sheet for your businesses
- Information on asset transactions within the past year
- Details on any outstanding loans you had throughout the year
- Payroll information
- Inventory closing balance for the previous year
Once you have all those pieces of information in hand, you can either begin to navigate the tax software or meet with your accountant.
If using a tax software product, the amount of time required to input the necessary information will vary depending on the package you use and the complexity of your return. Most programs will walk you through the details of the return and it may only take you an evening or two to come to the end of your tax return for the year.
When working with an accountant, they will handle everything once your information is dropped off. Depending on when you initiate the work, it may be a few weeks until your return is finalized and ready for your signature and submission. However, the upside of this is that the accountant will not only input all the information, they will analyze your tax documents for accuracy and assure deductions are maximized.
These professionals will also be actively looking for opportunities to reduce your tax liability as much as possible through credits and deductions. By working with a CPA, you’re able to ensure you are able to maximize your tax deductions and receive advice on future tax saving goals.
2. Complexity
If you own a business, the complexities alone may mean working with a tax preparer is a great idea. You don’t have to spend hours trying to understand the over-the-top complexities of the U.S. tax code. A qualified CPA such as Gift CPAs can do it for you and save you all the trouble!
3. Price
As you can guess, using a tax software purchased at Costco or Walmart for $59.99 is less costly than working with an accountant who will analyze the complexities of your tax return. Working with a Gift CPA accountant, we charge a set fee. At Gift CPA we will provide the same quality of services no matter how complex your return is. We determine your fee based on the level of complexity.
4. Answering questions, getting advice
Your situation has many nuances specific to you, and an accountant will be able to help you better than simple software will. He or she can answer any questions you have – and not just at tax time, but throughout the year as well. They can also make recommendations on how to reduce your taxable income or help you find tax friendly ways to accomplish your goals.
Taking The Next Step
Does hiring an accountant sound like a good next step for you? The experts at Gift CPAs would love to answer your questions and be a resource for you. You can chat with our team today to learn more about hiring an accountant to help with your business taxes.
